It’s been a difficult ride for the crypto market until 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down, the FTX crash turned them more dire. What is the likelihood that the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for individuals to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, this makes it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long-term, being patient and disciplined is essential.